Why Owning a Home is Better Than Renting
The debate over renting or buying a home is a long-standing argument with personal opinions that can make sense from an individualistic background. For example, if you grew up in a home that your parents owned, you may have strong feelings about eventually owning a family home of your own. Opposite to this, if you moved around a lot, living in an apartment could be considered the norm. Setting aside personal feelings, owning a home has enduring financial benefits that renting simply doesn’t offer.
Here are a few reasons why owning a home is better than renting:
Reason #1: Build Equity. When you buy a home, your mortgage payments are going towards an increase in equity of the property. Home equity is the portion of the home’s value that you, as the owner, actually own. Until you have fully paid off the mortgage, you only own a share of the home’s value. If you rent, your monthly rent payment isn’t achieving you long term gain. One way to think of your monthly home mortgage is like a “forced savings” account. Every time you pay your mortgage your money goes towards paying off the home, which is building equity. As the value of your home rises, you earn additional equity. One contrary example to this is when you buy a car. A car’s value depreciates over time as the mileage goes up and it wears out with use. If you buy a new car for $30,000 and attempt to resell it years later, the chances of selling it for the full price are impossible whereas if you buy a home for $100,000 and the property’s value has risen, you can end up doubling the home’s selling price.
Reason #2: Fixed-rate mortgage vs. increase in monthly rent. Once you’ve paid off your mortgage, you no longer have to worry about a monthly bill whereas if you continue to rent, that payment won’t go away and the price increases every year. What’s even more rewarding of owning a home vs. renting is that once you’ve paid off your mortgage, you can use that money on home expansions or backyard amenities that you’ve been dreaming of but haven’t been able to afford. The key is to set realistic expectations that paying off a home will take years but comes with long-term success.
Reason #3: Develop healthy spending habits. Saving for a home is no easy task. Saving money, in general, is difficult when you find yourself living paycheck to paycheck. While it may seem impossible, with discipline and a lot of determination, saving for a home is achievable. The process of saving for a home develops subtle spending habits that make you more conscious of how you’re truly spending your money. Every dollar suddenly counts. A few methods of setting aside money for a house down payment includes setting aside extra cash as opposed to spending it on let’s say a new pair of shoes. This includes your tax refund, raises or bonuses from work, birthday money, leftover money after paying bills, and any cash you were thinking of spending otherwise. It may take time but during those critical years of saving, your home fund will eventually gain momentum and you will have a greater grasp of your well-earned dollar.
The takeaway: Living in El Paso where the average cost of rent in 2018 for an apartment is $745 and the cost of housing is 30% lower than the national average, you are at a great advantage to be able to own a home. El Paso was recently ranked the 4th hottest real estate market to watch in 2018 by Trulia.com, an online residential real estate site. The high ranking is largely due to the city’s strong job growth and affordable housing throughout various parts of town. Moreover, the expansion of new businesses and attractions opening will eventually attract more residents, which is why now is the best time to invest in a home.
Getting ready to buy a home in El Paso? Contact Cullers Homes
At Cullers Homes, your modern dream home can become a reality. We encourage you to explore our floorplans and consider a custom built design that can be enjoyed for years to come. Contact us today to learn more about our signature homes.
